Montana Grazing Preference Overturned

[1_pointer]

In UT the open range law states that to keep livestock off of deeded land you are responsible for the fencing of your land. If livestock wander from deeded to public lands the enforcement of the tresspass is up to the managing agency, which here is usually not the state but either the BLM or USFS. The state sections are often included in a fed. administered allotment, but the price/AUM for that land is set by the state and goes to the state. The administration of the land is done by the fed. agency through an agreement.

 

[JoseCuervo]

HELENA (AP) -- The state Land Board weighed its options Monday in how to respond to a judge's decision that concluded farmers and ranchers leasing state land should not have an advantage in fending off competing lease bids.

The board is considering appealing the decision by District Judge Jeffrey Sherlock, revising its procedures to comply with it or going through the Legislature to change the law.

No decision was made, although Gov. Judy Martz asked the Department of Natural Resources and Conservation to return with recommendations at the next board meeting in August.

The state has until mid-September to decide whether to appeal.

"We need to have continued discussions on this between now and the next regular board meeting," DNRC Director Bud Clinch said.

In addressing possible implications of the ruling, Attorney General Mike McGrath said he did not believe the decision necessarily strip current leaseholders of their preference rights.

"The judge did not require that leases be awarded to the highest bidder," he said.

State Auditor John Morrison said the decision boiled down to language in the law that gives leaseholders a preference when bidding against someone else to keep their grazing and crop leases. Sherlock ruled the law infringes upon the Land Board's discretion to determine the best leaseholder for a piece of property.

Morrison recommended amending the statute through legislation and urged farmers and ranchers not to panic over the decision, which he felt had been misunderstood.

"(The board) must still exercise discretion on a case by case basis," he said.

Sherlock, of Helena, declared the law unconstitutional in a ruling two weeks ago.

Besides interfering with the board's constitutional rights, Sherlock said the law also puts board members in a position of having to stay with the current leaseholder regardless of whether that would be most beneficial for the land or the schools getting money from state leases.

The decision rattled Montana's agriculture community, and could affect nearly 6,000 people holding 10,000 crop and grazing leases on 4.8 million acres of state land.

John Bloomquist, attorney for several agricultural groups, appreciated the Land Board's take on the ruling, but said it still leaves a "black hole" in the lease renewal process and uncertainty among leaseholders.

"It begs the question still: Without a Land Board policy, you really don't have preference recognized," Bloomquist said. "That's what everybody is saying from the agriculture community."

Bloomquist represents the Montana Stockgrowers' Association, Montana Public Lands Council and Montana Association of Grazing Districts. He said the groups were awaiting a Land Board decision before deciding whether to appeal.

 

[JoseCuervo]

The verdict is in: Montanans own state School Trust lands; the farmers and ranchers who lease them don't.

State District Judge Jeffrey Sherlock of Helena ruled last week that state government may not offer leaseholders preference when considering competing bids for grazing, farming and other uses of nearly 5 million acres. Doing so, he said, unconstitutionally constrains the state Land Board's ability to award leases based on the best interests of the land, the public and schools.

Count on this one to be appealed to the state Supreme Court. As do those who lease federal lands for agricultural purposes, many leaseholders have come to regard the ability to renew their leases under favorable terms to be a kind of property right. It was considered a major act of land-management reform in Montana when the state began soliciting competing bids for lands up for lease; but until now, the state's brand of competition has entitled lessees to meet any competing bid. This practice can't help but encourage lessees to lowball their bids. Why not? If someone submits a competing bid, you can simply match it - and perhaps later petition to renegotiate the terms.

In extending to leaseholders the right to meet competing bids, the state has provided lessees valuable options for which they don't pay. We don't begrudge the lessees the advantages they obtain as a result, but we do think it's bad business for the state to give away something of public value.

It's important to remember the purpose of the lands in question. At statehood, Montana received from Congress a sizeable allotment of land to be held in trust and managed for the sole purpose of generating revenue for public schools.

The income-earning potential of what are known as School Trust lands has been dwarfed over time by the rising cost of public schools. Nevertheless, every dollar generated through leasing and timber sales certainly counts.

Farmers, ranchers and others benefit from leases. In a whole lot of cases, so does the state and its people. And because many farmers and ranchers are excellent stewards of the land, leasing becomes a way to privatize some of the land-management responsibilities that otherwise would fall to state agencies and taxpayers.

But the prime objective for School Trust lands is dictated by the Montana Constitution, and that's to generate the maximum revenue over time.

That can't be done under a system that encourages leaseholders to bid low, knowing they can raise the ante if necessary. Open, spirited competition may or may not result in higher revenue to the state, but it's the only way the Land Board can be certain School Trust leases serve their intended purpose.

 

[Ithaca 37]

You'll see a bill in the MT Legislature next winter trying to stack the deck in favor of welfare ranchers again.

 

[JoseCuervo]

A Helena district judge has done it again: made a high-profile ruling that has the potential to upset the applecart.

In April, Judge Jeffrey Sherlock rocked the taxation-for-education world by declaring unambiguously that Montana's way of paying for education in its public elementary, middle and high schools violated the state Constitution in several ways.

This past week, he shook another Montana institution to its roots, saying that grazing and farming leaseholders get an unconstitutional preference in the awarding of state leases.

As happened three months ago in the school case, reaction to the recent lease ruling was swift and heated.

"This decision may have very detrimental economic impacts on these producers who suddenly find themselves without the lease of a sizable piece of land they have historically depended on," said Steve Pilcher, executive vice president of the Montana Stockgrowers Association.

He may be right, but, as in the school-funding case, the opinion may just be the catalyst for solving a long-standing inequity or problem.

For example, the judge put a delayed effective date on his school-funding opinion in order to give the Legislature and administration time to address the problem (the lawmakers' every-other-year regular session starts in January).

That timetable was jeopardized in late June when the state decided to appeal the ruling to the Supreme Court, but the justices recognized the timing issue and put the case on a fast track so they can rule before the legislative session starts.

If it stands, Sherlock's school ruling will send the state back to the chalkboard to, among other things, reconfigure the school-funding system.

The ruling was cheered by educators and other Montanans who think the system is broken; it was sharply criticized by others, especially the lawmakers who crafted the system.

We'll have to stay tuned to learn how it comes out, but policy makers on both sides of the issue hope to turn it to their advantage.

That's possible because Sherlock's ruling didn't provide a solution. It said the present system is unacceptable, but it threw the problem-solving back where it belongs: with the state's elected representatives.

Now Sherlock's judicial focus has turned to the approximately 6,000 Montana farmers and ranchers who have for years benefitted from a preference in the way crop and grazing leases on state land have been awarded.

Under the law, a current leaseholder can head off a competing bid simply by matching that bid amount.

That's what happened to Bill Broadbent of Geyser. He wanted to lease a nearby chunk of state land so he bid four times what was being paid by neighbors Gale and Andrea Harlow. The Harlows matched the bid, however, and were allowed to keep the lease -- though the state Land Board cut the rate by more than half.

Broadbent sued, and Sherlock agreed with him that the current-leaseholder preference unconstitutionally prevented the state from getting the maximum benefit possible from state lands (and, by the way, prevented Broadbent from expanding his operation with a competitive bid for a public resource).

The ruling undoubtedly will be appealed, but based on some other rulings it wouldn't surprise us to see it upheld. We'd offer a couple of points:

First, as came to mind with earlier rulings about maximizing the value of state landholdings, somewhere there should be room for the larger case that dollars and cents aren't the only components of "value."

Economic stability, lifestyle, a clean environment: All have tremendous value -- "priceless" as the credit card commercials say -- and you can't necessarily put a dollar amount on them.

Second, in his lease decision Judge Sherlock has made another ruling based on the state Constitution, and in the first, the school case, he said the Legislature needed to revisit education funding within the parameters of -- and addressing the values laid out in -- the Montana Constitution.

In the lease case, it seems to us he's left the door open to legislative rule-making that would give guidance to the state Land Board as it considers what "value" means when considering whether to renew or replace a lease.

A final note: Contrary to what some critics are saying, Judge Sherlock is not legislating from the bench; he is interpreting laws based on what is, in fact, fairly clear language in the Constitution.

A year or two from now, we may marvel at the good that came from these controversial rulings.

 

[Nemont]

I think the bill being debated in the backrooms is one that will require if you hold a grazing lease it must be grazed. At least that is what I keep hearing around here.

Nemont

 

[1_pointer]

Grazed...at what level? If it's administered by the feds, which is common in No. UT, they allow non-use for up to 5yrs without losing the permit. That can be lengthened in bad grazing years, ie fires and/or drought.

 

[Nemont]

1-Pointer,
I don't know. All I hear is rumor for take it for what it is worth. The cattlemen of this state will have some sort of legislative agenda to address this.

Nemont

 

[JoseCuervo]

I have seen plans with a single goat to be grazed, for a single day each season.... Meets the standard.